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                                                                   EXHIBIT 10.38

                 AMENDMENT NO. 1 TO IFN-G DISTRIBUTION AGREEMENT


                This AMENDMENT NO. 1 ("Amendment") is entered into as of this
the 4th day of April, 2000, by and between AMARILLO BIOSCIENCES, INC., a Texas
corporation with its principal place of business at 800 West 9th, Amarillo,
Texas 79101 ("ABI"), and HAYASHIBARA BIOCHEMICAL LABORATORIES, INC. with its
principal place of business at 2-3, Shimoishii 1-chome, Okayama 700, Japan
("HBL") (ABI and HBL being hereinafter collectively referred to as the
"Parties").

                WHEREAS, the Parties have heretofore entered into that certain
Distribution Agreement: IFN-G: Human, Oral; Other Species, All Routes, dated
September 17, 1997 (the "Distribution Agreement"); and further

                WHEREAS, the Parties desire to herewith amend the Distribution
Agreement as herein set forth;

                THEREFORE, in consideration of these presents and for other good
and adequate consideration the receipt and sufficiency of which are evidenced by
the execution hereof, the Parties hereby agree as follows:

                Section 1 of the Distribution Agreement is hereby amended to
read in its entirety as follows:

                "SECTION 1. RIGHT TO DISTRIBUTE. HBL hereby grants to ABI the
                exclusive right to distribute product containing HBL IFN-g for
                inhalation and/or oral use in human species and use by all
                routes of administration in non-human species worldwide, except
                Japan."

                In addition, the first sentence of Section 4, "Term", is hereby
amended to read in its entirety as follows:

                "Unless sooner terminated as hereinafter provided, this
                Agreement shall remain in effect for a period of thirteen (13)
                years from the date of this Agreement."

                No amendments or changes other than the foregoing are made to
the Distribution Agreement. The Distribution Agreement, as hereby amended,
continues in full force and effect according to its terms.

                IN WITNESS WHEREOF, the Parties hereto have caused this
Amendment to be executed in duplicate by their duly authorized representatives
as of the date first above written.

ABI:                                HBL:

AMARILLO BIOSCIENCES, INC.          HAYASHIBARA BIOCHEMICAL
                                    LABORATORIES,  INC.

By:  //signature on file//          By:  //signature on file//
   -----------------------             -----------------------
   Dr. Joseph M. Cummins               Mr. Ken Hayashibara
   President                           President


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