Immune Response Falls on Critical Study of HIV Drug
Carlsbad, California, Nov. 1 2000 (Bloomberg) -- Immune Response Corp.
shares fell as much as 36 percent after researchers said the
pharmaceutical company tried to block publication of a study that found
its lead drug Remune isn't effective for treating HIV.

Shares of Immune Response fell $1.72 to $4.34 in midday trading.
Earlier, they touched $3.88. Before today, Immune Response shares had
risen 40 percent for the year on prospects for Remune, the company's
lead product.

Immune Response filed for binding arbitration on Sept. 1 to stop the
University of California and lead researcher Dr. James Kahn from
publishing the study of Remune and is seeking $7 million to $10 million
in damages, said Christopher Patti, general counsel for the university.
The company's effort to head off publication failed -- the study appears
in today's Journal of the American Medical Association.

``Obviously, there is a controversy brewing,'' said Darren Mac, an
analyst with Gruntal & Co. ``The main finding of this study differs from
what Immune Response and other investigators have found concerning the
virological efficacy of Remune.''

The study showed patients on the drug fared no better than those who
received standard antiviral medications without Remune. Primary findings
were released in May 1999, when an independent group of experts
monitoring the 2,527-patient study halted it because the drug wasn't
helping patients live longer.

The company, though, had conducted a sub-study of 250 patients that its
researchers said showed the drug could reduce the amount of HIV in the

Immune Response criticized Kahn for not including a favorable review of
the sub-study and for not sending copies of his research to more than
six dozen investigators who enrolled patients in the study, before
publishing it.

``This is the company's only late-stage product,'' Mac said. ``If
there's uncertainty, obviously the shares will react.''

Lead Product

Remune is based on an approach that stimulates the immune system, which
was proposed by polio vaccine pioneer, Jonas Salk, a co-founder of the
company. The drug is intended to spur the immune system of an HIV-
infected person to attack the virus.

Immune Response has no drugs on the market, though Remune is the
furthest along in development of the company's experimental immune-based
therapies for HIV, autoimmune diseases and cancer.

Continued development of Remune depends on support from Agouron
Pharmaceuticals, its primary marketing partner for the drug. Agouron is
owned by Pfizer Inc.

The dispute between the company and the researchers ``puts a cloud over
the marketing aspects,'' said Richard Stover, an analyst with Arnhold
and S. Bleichroeder.

In 1998, Immune Response licensed marketing rights for the drug to
Agouron in an agreement worth as much as $77 million. As of June 30, the
company had received $47 million in research and development funds,
licensing fees and progress payments.

The dispute between Immune Response and the researchers ``leaves you
saying, `I either believe this investigator, that there's no efficacy,
or I believe in people who are putting their money on the line, like
Pfizer,' '' said Alan Auerbach, an analyst with First Security Van

Pfizer makes the AIDS drug, Viracept.

(Immune Response will hold a Webcast conference call today at 4 p.m. EST
to discuss Remune and related matters. To listen, go to