<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 June 30, 2000

                                       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)

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

           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           21,927,904  shares
  ----------------------------        -----------------------
<S>                               <C>
            (Class)               (Outstanding at August 8, 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 June 30, 2000 and
                        December 31, 1999                                               3

                   Condensed Consolidated Statements of Operations for the
                        three- and six-month periods ended June 30, 2000 and 1999       4

                   Condensed Consolidated Statements of Cash Flows for the
                        six-month periods ended June 30, 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                                                    13

  PART II.         OTHER INFORMATION                                                   14

     ITEM 1.       LEGAL PROCEEDINGS.                                                  14

     ITEM 2.       CHANGES IN SECURITIES.                                              15

     ITEM 3.       DEFAULTS UPON SENIOR SECURITIES.                                    15

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

     ITEM 5.       OTHER INFORMATION.                                                  17

     ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K.                                   18

  SIGNATURES                                                                           19

  EXHIBIT INDEX                                                                        20
</TABLE>

                                      -2-
<PAGE>   3
PART I - FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

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


<TABLE>
<CAPTION>

                                                                                            JUNE 30,         DECEMBER 31,
                                                                                              2000                1999
                                                                                         -------------       -------------
                                                                                          (UNAUDITED)           (NOTE 1)
         ASSETS

<S>                                                                                      <C>                 <C>
  Current Assets:
    Cash and cash equivalents .......................................................    $      76,135       $      28,081
    Short-term investments ..........................................................           37,432              24,235
    Accounts receivable .............................................................            3,768               3,241
    Inventory .......................................................................            2,082               2,082
    Prepaid expenses and other current assets .......................................            1,179               1,009
                                                                                         -------------       -------------
      Total current assets ..........................................................          120,596              58,648
  Property and equipment, net .......................................................           24,800              25,635
  Deposits and other assets .........................................................            6,762               7,411
                                                                                         -------------       -------------

  TOTAL ASSETS ......................................................................    $     152,158       $      91,694
                                                                                         =============       =============

         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

  Current Liabilities:
    Accounts payable ................................................................    $       1,593       $       3,038
    Accrued compensation ............................................................            1,985               1,739
    Accrued clinical trial costs ....................................................            1,076                 846
    Accrued interest ................................................................            1,438               1,438
    Accrued expenses and other liabilities ..........................................            5,078               6,591
    Current portion of capital lease obligations ....................................               38                 101
    Current portion of long term debt ...............................................            2,846               2,680
                                                                                         -------------       -------------
      Total current liabilities .....................................................           14,054              16,433
  Deferred rent .....................................................................            1,888               2,214
  Capital lease obligations, noncurrent .............................................               --                   9
  Long-term debt, net of current portion ............................................          111,191             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 June 30, 2000 and
      December 31, 1999 .............................................................               --                  --
    Common stock, $0.001 par value; 100,000,000 shares authorized as of
      June 30, 2000; 30,000,000 shares authorized as of December 31,1999;
      21,357,879 and 16,669,018 shares issued and outstanding at June 30,
      2000 and December 31, 1999, respectively ......................................               21                  17
    Additional paid-in capital ......................................................          257,001             143,822
    Notes receivable from stockholders ..............................................              (50)                (83)
    Deferred compensation ...........................................................              (74)                (96)
    Accumulated deficit .............................................................         (231,873)           (183,279)
                                                                                         -------------       -------------
  Total stockholders' equity (deficit) ..............................................           25,025             (39,619)
                                                                                         -------------       -------------

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ..............................    $     152,158       $      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             SIX MONTHS ENDED
                                                             JUNE 30,                     JUNE 30,
                                                     -----------------------       -----------------------
                                                       2000           1999           2000           1999
                                                     --------       --------       --------       --------
<S>                                                  <C>            <C>            <C>            <C>
REVENUES:
  Contract revenues and grants ................      $  2,378       $  2,944       $  5,035       $ 18,475
                                                     --------       --------       --------       --------

OPERATING EXPENSES:

  Research and development ....................        17,476         14,362         35,070         28,367
  Acquisition of in-process research
    and development ...........................            --             --         10,904             --
  General, administrative and marketing .......         3,369          3,151          5,937          5,833
                                                     --------       --------       --------       --------

TOTAL OPERATING EXPENSES ......................        20,845         17,513         51,911         34,200
                                                     --------       --------       --------       --------

LOSS FROM OPERATIONS ..........................       (18,467)       (14,569)       (46,876)       (15,725)
                                                     --------       --------       --------       --------

OTHER INCOME/(EXPENSE):
  Interest income .............................         1,648          1,062          2,370          2,273
  Interest expense ............................        (2,056)        (1,613)        (4,145)        (3,187)
                                                     --------       --------       --------       --------

  TOTAL OTHER INCOME (EXPENSE)
   net ........................................          (408)          (551)        (1,775)          (914)
                                                     --------       --------       --------       --------

NET LOSS ......................................      $(18,875)      $(15,120)      $(48,651)      $(16,639)
                                                     ========       ========       ========       ========

Basic and diluted net loss per share ..........      $  (0.90)      $  (0.96)      $  (2.55)      $  (1.06)
                                                     ========       ========       ========       ========

Shares used in computing basic and diluted
  net loss per share ..........................        21,039         15,749         19,067         15,726
                                                     ========       ========       ========       ========
</TABLE>


                             See accompanying notes

                                      -4-
<PAGE>   5

                                     AVIRON
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                       SIX MONTHS ENDED
                                                                                            JUNE 30,
                                                                                   --------------------------
                                                                                       2000            1999
                                                                                    ---------       ---------
CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                                 <C>             <C>
Net loss .....................................................................      $ (48,651)      $ (16,639)

Adjustment to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization .........................................          2,770           2,193
       Amortization of convertible debt offering costs .......................            282             288
       Amortization of deferred compensation .................................             22              76
       Issuance of warrant for acquisition of in-process research
          and development ....................................................         10,904              --

Changes in assets and liabilities:
       Accounts receivable ...................................................           (527)         (2,735)
       Inventory .............................................................             --            (956)
       Prepaid expenses and other current assets .............................            (70)            216
       Deposits and other assets .............................................            765            (995)
       Accounts payable ......................................................         (1,445)          1,137
       Accrued expenses and other liabilities ................................           (724)            186
       Deferred rent .........................................................           (326)            600
                                                                                    ---------       ---------

Net cash used in operating activities ........................................        (37,000)        (16,629)
                                                                                    ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of investments ..............................................       (232,689)        (28,536)
       Maturities of investments .............................................        219,551          40,138
       Loan to officer .......................................................           (500)             --
       Expenditures for property and equipment ...............................         (1,935)         (7,115)
                                                                                    ---------       ---------

Net cash (used in) provided by investing activities ..........................        (15,573)          4,487
                                                                                    ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Principal payments on capital lease obligations .......................            (72)           (192)
       Principal payments on long-term debt ..................................         (1,300)             --
       Notes to shareholders collected .......................................             33              --
       Repurchase of common stock ............................................             (4)             --
       Proceeds from issuance of common stock, net ...........................        101,970             366
                                                                                    ---------       ---------

Net cash provided by financing activities ....................................        100,627             174
                                                                                    ---------       ---------

Net increase (decrease) in cash and cash equivalents .........................         48,054         (11,968)

CASH AND CASH EQUIVALENTS, at beginning of period ............................         28,081          28,164
                                                                                    ---------       ---------
CASH AND CASH EQUIVALENTS, at end of period ..................................      $  76,135       $  16,196
                                                                                    =========       =========

Supplemental schedule of non-cash financing activities:
         Issuance of warrant for legal settlement ............................            313              --
Supplemental disclosures of cash flow information:
         Cash paid for interest ..............................................          3,814           2,907
</TABLE>

                             See accompanying notes


                                      -5-
<PAGE>   6

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 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 June 30, 2000 and for the three-month and
six-month periods ended June 30, 2000 and 1999 are 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 and
six-month periods ended June 30, 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, pursuant to the guidance in SAB 101, a change in accounting
will be 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, which was recognized as revenue in the first quarter of
1999. Based on recent guidance from the SEC staff on the implementation of SAB
101, we expect to make this change in our accounting in the fourth 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

                                      -6-
<PAGE>   7


deferred revenue and recognized as revenue ratably over 2000 and future periods.
We have not yet determined the precise period over which the revenue will be
recognized pending additional implementation guidance from the SEC. Prior
financial statements will not be restated.

    2.     Financing Transactions during the six-months ended June 30, 2000.

On January 11, 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. On June 9, 2000, Acqua Wellington increased its equity
financing commitment to $8.0 million per month and increased its total
commitment from $48.0 million to $84.0 million through February 2001. The
commitment is reduced by the monthly allocation whether we draw on the
commitment or not. These funds are available at our discretion at a small
discount to the market price of our common stock with the market price to be
determined based on the volume weighted average market price for the 18 trading
days ending two business days prior to sale.

The following table summarizes Acqua Wellington financing transactions completed
during 2000.

<TABLE>
<CAPTION>

                    Date Sold                      # of Shares          Price Per Share         Aggregate Proceeds
                    ---------                      -----------          ---------------         ------------------
         <S>                                       <C>                  <C>                      <C>
         Transactions during six months ended
           June 30, 2000:

                    March 6, 2000                      253,935            $31.50                  $ 8.0 million
                   April 13, 2000                      144,185             27.74                    4.0 million
                    May 12, 2000                       348,983             22.92                    8.0 million
                    June 12, 2000                      339,955             23.53                    8.0 million
                                                     ---------                                    -------------
                        Total                        1,087,058                                     28.0 million
                                                     ---------                                    -------------

         Transactions subsequent to
           June 30, 2000:
                    July 11, 2000                      270,013             29.63                   8.0 million
                   August 8, 2000                      262,200             30.51                   8.0 million
</TABLE>


As of June 30, 2000, $64.0 million of these funds were available, with $48.0
million available after the financings in July and August 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 on February 1, 2000.

On February 3, 2000, we sold 103,322 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.

On April 10, 2000, we sold 2,200,000 shares of our common stock in a follow-on
public offering at a price of $22.50 per share. 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 the company in the public offering.
Aggregate net proceeds to the Company from both the public offering and the AHP
transaction, after expenses and underwriters' discounts and commissions, were
approximately $60.7 million.

      3.   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, as the related technology is under
development, 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

                                      -7-
<PAGE>   8
purchase a number of shares equal to the difference between 340,000 shares and
1.25 percent of the common stock outstanding.

On June 23, 2000, as part of a legal Settlement Agreement with ARCH Development
Corporation, or ARCH, we issued to ARCH a warrant to purchase 14,077 shares of
our common stock at an exercise price of $23.00 per share.

      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. Through June 30, 2000, we have
granted options for the purchase of an additional 180,600 shares of common stock
at prices ranging from $24.25 to $40.56 with all of the same vesting provisions.


      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.

                                      -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 intranasal live virus influenza vaccine. 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 development
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. In the United
States, influenza epidemics are responsible for approximately 20,000 deaths and
cause illness in 10-20 percent of the population each year. 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 over
age 64, 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. FluMist induces an immune response
similar to that resulting from natural infection. With FluMist, the immune
response is induced in the nose and throat, the point of contact for airborne
infections such as influenza, as well as in the bloodstream. FluMist has been
shown to provide a high protection rate against influenza in Phase 3 clinical
trials in children and healthy adults. In addition, reductions in days of
illness, antibiotic use, health resource use and missed work because of illness
were observed in a trial conducted in healthy working adults. 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 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 our manufacturing processes, facilities and
equipment, and tests used to characterize and release our product.

          Cooperative Research and Development Agreement

On June 23, 2000, we announced the extension of our cooperative research and
development agreement, or CRADA, for the development of FluMist with the
National Institute of Allergy and Infectious Diseases, or NIAID, of the National
Institutes of Health, or NIH, through June 2003.


                                      -9-
<PAGE>   10

      Other Products in Development

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

       -      a vaccine to prevent cytomegalovirus, or CMV, disease began
              clinical testing during the second quarter of 2000. CMV is the
              leading infectious cause of birth defects in the United States;

       -      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; and

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

We 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
responsible for severe lower respiratory infection in infants and young
children.

      Personnel Announcements

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 announced that Edward J. Arcuri, Ph.D. had been promoted to
the newly created position of Senior Vice President, Operations.

On August 7, 2000 we announced the appointments of David M. Wonnacott as Vice
President, Regulatory Affairs and Charles F. Katzer as Vice President,
Manufacturing.

      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 $231.9 million as of June 30, 2000, and
expect to incur substantial operating losses over at least the next several
years.

      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 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 not be found to be
safe or effective 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.


                                      -10-
<PAGE>   11

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2000 AND 1999

      Revenues

We earned $2.4 million in revenue for the three months ended June 30, 2000,
compared to $2.9 million for the three months ended June 30, 1999. In the second
quarters of 2000 and 1999, revenues were comprised principally of expense
reimbursements for clinical and commercialization expenses from Wyeth related to
the clinical development of FluMist, under the terms of our FluMist
collaboration agreement.


      Operating Expenses

Research and development expenses increased to $17.5 million for the three
months ended June 30, 2000, from $14.4 million for the three months ended June
30, 1999. The increase was due primarily to an increase in development
activities, documentation, validation and other commercial scale-up expenses
associated with FluMist. These increases were partially offset by reductions in
spending on clinical trials. We expect our expenses to increase in the future as
development and manufacturing activities expand in preparation for potential
commercialization of FluMist.

General, administrative and marketing expenses rose to $3.4 million in the three
months ended June 30, 2000 from $3.2 million for the three months ended June 30,
1999 due to an increase 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 decreased to $408,000 in the three months ended June 30,
2000, as compared to $551,000 for the three months ended June 30, 1999. The
decrease in net interest expense reflects the increase in interest expense in
connection with debt financing in December 1999 which is more than offset by the
increase in interest income due to higher average balances of cash, cash
equivalents, and investments resulting from the financing transactions in
December 1999 and during the six months ended June 30, 2000.




SIX MONTHS ENDED JUNE 30, 2000 AND 1999

      Revenues

We earned $5.0 million in revenue for the six months ended June 30, 2000,
compared to $18.5 million for the six months ended June 30, 1999. The 2000
revenues were comprised primarily of amounts earned from Wyeth under the FluMist
collaboration agreement combined with other revenues from other contracts and
research grants. The 1999 revenues were comprised primarily of amounts earned
from Wyeth under the FluMist collaboration agreement, which included a
non-refundable initial payment in the amount of $15.0 million and $2.8 million
in payments related to the clinical development of FluMist, combined with other
revenues from other contracts and research grants.

      Operating Expenses

Research and development expenses increased to $35.1 million for the six months
ended June 30, 2000, from $28.4 million for the six months ended June 30, 1999.
The increase was due primarily to an increase in development activities,
documentation, validation and other commercial scale-up expenses associated with
FluMist. These increases were partially offset by reductions in spending on
clinical trials. We expect our 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 in the first quarter of

                                      -11-
<PAGE>   12

2000 due to the amendment of our agreement with the University of Michigan to
accelerate the issuance of a warrant to the university which was originally
granted in connection with our license to cold-adapted influenza technology
which is the basis for FluMist.

General, administrative and marketing expenses rose to $5.9 million in the six
months ended June 30, 2000, compared to $5.8 million for the six months ended
June 30, 1999, due to an increase 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 $1.8 million in the six months ended June 30,
2000, as compared to $914,000 for the six months ended June 30, 1999. The
increase in net interest expense reflects the increase in interest expense in
connection with debt financing in December 1999, which is partially offset by
the increase in interest income due to higher yields on average balances of
cash, cash equivalents, and investments during the six months ended June 30,
2000, as compared with the same period of 1999.

      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, pursuant to the guidance in SAB 101, a change in accounting
will be necessary for the $15.0 million up-front license fee received from
Wyeth, which was recognized as revenue in the first quarter of 1999. Based on
recent guidance from the SEC staff on the implementation of SAB 101, we expect
to make this change in our accounting in the fourth 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 ratably over 2000 and future periods. We have not yet determined the
precise period over which the revenue will be recognized pending additional
implementation guidance from the SEC. Prior financial statements will not be
restated.

LIQUIDITY AND CAPITAL RESOURCES

We had cash, cash equivalents and marketable securities, at June 30, 2000, of
approximately $113.6 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, convertible debt securities, and other debt financing. Through December
31, 1999, we had raised approximately $263.0 million from such activities, net
of offering expenses. During the six months ended June 30, 2000, we raised
approximately $102.0 million through the sale of common stock, bringing the
total raised through financing activities since inception to approximately
$365.0 million. On January 11, 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. On June 9, 2000
Acqua Wellington increased this commitment to $8.0 million per month and
increased its total commitment from $48.0 million to $84.0 million through
February 2001. The commitment is reduced by the monthly allocation whether we
draw on the commitment or not. As of June 30, 2000, $64.0 million of these funds
were available, with $48.0 million available after the financings in July and
August 2000.

For the first six months of 2000, $37.0 million of cash was used in operations
as compared with the first six months of 1999, during which period $16.6 million
of cash was used in operations. The increase in cash used in operating
activities was primarily due to an increase in the net loss of $32.0 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 during the
remainder of 2000 and beyond as we develop our products and prepare for the
potential commercial launch of FluMist.

Cash expended for capital additions amounted to approximately $1.9 million and
$7.1 million for the first six 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 the remainder of 2000,


                                      -12-
<PAGE>   13

primarily in connection with building additions at our Pennsylvania facility and
equipment additions at all facilities. Principal payments in the amount of $1.3
million were made during the first six 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 greater portions of the payments are
allocated to principal reduction.

In July and August 2000, we generated an additional $16.0 million of equity
financing in two transactions for sale of common stock. 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 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.



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, and generally hold such
securities to maturity. 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 June 30, 2000, we had cash and cash
equivalents of $76.1 million, with a weighted average interest rate of 6.50
percent per year, and short-term investments with a basis of $37.4 million and a
fair value of $37.5 million, with a weighted average interest rate of 6.56
percent.

                                      -13-
<PAGE>   14

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 patent 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 in 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 made 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.


                                      -14-
<PAGE>   15

ITEM 2. CHANGES IN SECURITIES.

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.

On June 23, 2000, as part of a legal Settlement Agreement with ARCH Development
Corporation, or ARCH, we issued to ARCH a warrant to purchase 14,077 shares of
our common stock at an exercise price of $23.00 per share. If the holder of such
warrant is unable to sell or otherwise dispose of the warrant shares pursuant to
Rule 144 of the Securities Act of 1933, as amended, then such holder may request
the Company to register such warrant shares.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

                 None

                                      -15-
<PAGE>   16

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


     The Company's Annual Meeting of Stockholders, or Annual Meeting, was held
on June 1, 2000. At the Annual Meeting, the stockholders of the registrant (i)
elected the two people listed below to serve as directors to hold office until
the 2003 Annual Meeting of Stockholders and until their successors are elected;
(ii) approved an amendment to our Amended and Restated Certificate of
Incorporation; (iii) approved an amendment to the Company's 1996 Equity
Incentive Plan; (iv) approved an amendment to our 1996 Non-Employee Directors'
Stock Option Plan; and (v) ratified the selection of Ernst & Young LLP as our
Independent Accountants for the fiscal year ending December 31, 2000.

     The Company had 20,625,940 shares of common stock outstanding as of April
14, 2000, the record date for the Annual Meeting. At the Annual Meeting, holders
of a total of 16,004,690 shares of common stock were present in person or
represented by proxy. The following sets forth information regarding the results
of the voting at the Annual Meeting.


                                      -16-
<PAGE>   17

<TABLE>
<CAPTION>

Proposal 1 -- Election of Directors

Director

  J. Leighton Read

<S>                                                                                            <C>
           Votes in Favor ...............................................................      15,910,491
           Votes Withheld ...............................................................          94,199

Director

    Reid W. Dennis

           Votes in Favor ...............................................................      15,945,615
           Votes Withheld ...............................................................          59,075


Proposal 2-- Amendment to the Company's Amended and Restated Certificate of Incorporation

           Votes in Favor ...............................................................      14,342,363
           Votes Against ................................................................       1,558,559
           Abstentions ..................................................................         103,768


Proposal 3 -- Amendment to the Company's 1996 Equity Incentive Plan

           Votes in Favor ...............................................................      10,939,271
           Votes Against ................................................................       3,322,974
           Abstentions ..................................................................       1,742,445


Proposal 4 -- Amendment to the Company's 1996 Non-Employee Directors' Stock Option Plan

           Votes in Favor ...............................................................      14,908,934
           Votes Against ................................................................         982,456
           Abstentions ..................................................................         113,300


Proposal 5 -- Ratification of Selection of Independent Accountants

           Votes in Favor ...............................................................      15,925,286
           Votes Against ................................................................          62,008
           Abstentions ..................................................................          17,396
</TABLE>



ITEM 5. OTHER INFORMATION.

                 None


                                      -17-
<PAGE>   18

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


              (a)    EXHIBITS

              ITEM   DESCRIPTION
              ----   -----------

              3.3    Certificate of Amendment of Amended and Restated
                     Certificate of Incorporation.

              4.15   Common Stock Purchase Agreement between the Company and
                     American Home Products Corporation, dated April 15,
                     2000.(1)

              4.16   Amendment to Common Stock Purchase Agreement, dated as of
                     June 9, 2000, by and between Acqua Wellington North
                     American Equities Fund Ltd. and the Company.(2)

              4.17   Warrant for Common Stock, issued to ARCH Development
                     Corporation.

              10.30  Form of Management Continuity Agreement.

              27.1   Financial Data Schedule.

----------
(1) Incorporated by reference to the correspondingly numbered exhibit to our
    Quarterly Report on Form 10-Q, File No. 0-20815, for the quarter ended March
    31, 2000, filed May 15, 2000.
(2) Incorporated by reference to Exhibit 4.1 of the Company's Form 8-K dated
    June 12, 2000.


              (b)    REPORTS ON FORM 8-K

              On June 12, 2000, we filed a Current Report on Form 8-K,
              reporting that the Company had entered into the Amendment to the
              Common Stock Purchase Agreement, dated as of June 9, 2000, with
              Acqua Wellington North American Equities Fund Ltd.





                                      -18-
<PAGE>   19

                                     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:        August 11, 2000                   By: /s/ C. BOYD CLARKE
     ----------------------------------           ------------------------------
                                                    C. Boyd Clarke
                                                    President and
                                                    Chief Executive Officer

Date:        August 11, 2000                   By: /s/ FRED KURLAND
     ---------------------------------            ------------------------------
                                                      Fred Kurland
                                                      Senior Vice President and
                                                      Chief Financial Officer

                                      -19-
<PAGE>   20

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

 NO. OF EXHIBIT               DESCRIPTION
 --------------               -----------
<S>                 <C>
      3.3           Certificate of Amendment of Amended and Restated
                    Certificate of Incorporation.

      4.15          Common Stock Purchase Agreement between the Company and
                    American Home Products Corporation, dated April 15, 2000.(1)

      4.16          Amendment to Common Stock Purchase Agreement, dated
                    as of June 9, 2000, by and between Acqua Wellington
                    North American Equities Fund Ltd. and the Company.(2)

      4.17          Warrant for Common Stock, issued to ARCH Development
                    Corporation.

      10.30         Form of Management Continuity Agreement.

      27.1          Financial Data Schedule.
</TABLE>

---------
(1)  Incorporated by reference to the correspondingly numbered exhibit to our
     Quarterly Report on Form 10-Q, File No. 0-20815, for the quarter ended
     March 31, 2000, filed May 15, 2000.
(2)  Incorporated by reference to Exhibit 4.1 of the Company's Form 8-K dated
     June 12, 2000.


                                      -20-