UPDATE 1-AVI BioPharma H1N1 drug shows promise in animal studies

* Drug AVI-7100 reduces viral concentration in ferrets

* Shares up 3 pct in premarket trade

Aug 24 (Reuters) - AVI BioPharma Inc (AVII.O) said its experimental drug for the treatment of H1N1 swine flu significantly reduced viral concentration in the upper respiratory regions of ferrets, as compared to standards of care.

Ferrets are the closest animal to humans when it comes to being infected with influenza.

Shares of the company rose 3 percent to $2.09 in premarket trade. They closed at $2.03 Monday on Nasdaq.

The company, which is focused on developing RNA-based therapies for rare and infectious diseases, said it conducted two studies that were supported by the Transformational Medical Technologies program of the U.S. Department of Defense.

The program aims to identify RNA-based drug candidates against the pandemic H1N1 virus, the company said in a statement. The drug, AVI-7100, is being developed under a contract awarded to AVI through the TMT program in June. [ID:nMKW28382a]

"Based on these results, TMT continues to support AVI-7100, funding an accelerated investigational new drug enabling program and Phase 1 study, as well as expanded preclinical evaluation that explores AVI-7100's potential as a broad spectrum influenza therapeutic," interim Chief Executive J. David Boyle said. (Reporting by Esha Dey in Bangalore; Editing by Maju Samuel)