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Immune Response Shares Fall 24%

November 02, 2000|From Bloomberg News

Immune Response Corp. shares on Wednesday fell 24% after researchers said the Carlsbad-based 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 $1.44 to close at $4.63 on Nasdaq. Earlier, they touched $3.88.

Immune Response filed for binding arbitration 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 Wednesday's Journal of the American Medical Assn.

"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 bloodstream.

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

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

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

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

In 1998, Immune Response licensed marketing rights for the drug to Pfizer unit Agouron Pharmaceuticals 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. Agouron is managing several studies of the drug that were started in late 1999.

"Despite the controversy and proceedings, Agouron remains committed and focused to the development of Remune," said Agouron spokeswoman Joy Schmitt.


Drug Reaction

Immune Response stock is off about 75% since reaching a 52-week high of $19.75 in March. It fell 24% Wednesday after a medical journal questioned the company's leading drug's efficacy.


Immune Response shares, monthly closes and latest on Nasdaq

Wednesday: $4.63, down $1.44

Source: Bloomberg News

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