FOR IMMEDIATE RELEASE

AUTOIMMUNE INC. ANNOUCES JOINT VENTURE WITH DESERET LABORATORIES INTERNATIONAL

Pasadena, California, August 20, 2002 – AutoImmune Inc. (Nasdaq: AIMM) today announced the formation of Colloral LLC, a joint venture with Deseret Laboratories International (a private company headquartered in St. George, Utah) for the manufacture, marketing and sale of Colloral‰, a product for nutritional support of patients with rheumatoid arthritis.

Robert C. Bishop, Ph.D., Chairman of the Board and Chief Executive Officer stated: “AutoImmune is very pleased to have found a partner that will provide the infrastructure and financial resources needed to put Colloral on the market before the end of this year. Our investment to form the venture constitutes technology and trademark licenses plus certain manufacturing equipment and procedures. AutoImmune will receive more than half the operating earnings of the new venture and has no obligation to fund operating losses.”

Scott A. Gubler, the Chairman and Chief Executive Officer of Deseret, remarked: “We believe that Colloral, which has been extensively tested in clinical trials, represents an attractive opportunity. It has been proven remarkably safe and of substantial benefit to a large number of patients. Our company, which has been in the nutraceutical business for more than 15 years, is well positioned to efficiently deliver this product to customers worldwide.”

All of the development work on Colloral was done under IND’s by AutoImmune and its collaborators, who originally anticipated marketing the product as a pharmaceutical. Early last year, the company transitioned the product to the nutritional supplement category by filing a “Notice of New Dietary Ingredient” with the FDA.

AutoImmune is a biopharmaceutical company involved in the development of a new class of mucosally administered therapies for the treatment of autoimmune and cell-mediated inflammatory diseases and conditions. Now operating as a virtual company, it has focused on licensing its technology with the goal of generating future revenue streams with minimal risk to its own assets. Teva Pharmaceuticals, Ltd., and BioMS Medical Corporation are also current licensees.

This release contains forward-looking statements which involve risks and uncertainties. The Company’s actual results may differ significantly from results discussed in the forward-looking statements due to a number of important factors, including, but not limited to the uncertainties of clinical trial results, the Company’s dependence on third parties for licensing revenue and the risks of technological change and competition. These factors are more fully discussed in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission in the section “Business-Factors to be Considered.” The discussion in the Annual Report on Form 10-K is hereby referenced into this release.