To Our Shareholders:
AutoImmune Inc. made significant progress this past year and remains optimistic its technology will ultimately be rewarded in the marketplace.
With the assistance of Business Development Resources, Inc., a consumer oriented marketing plan was created for the dietary supplement products manufactured by our joint venture with Deseret Laboratories, Inc. The initial results from a direct mail test program during the fourth quarter were encouraging and we have already begun to expand this effort to reach a larger group of potential customers. The ultimate success of this initiative will be determined by the product re-order rate which translates into ongoing revenue for the venture.
AutoImmune has licensed two applications of its intellectual property to capable partners who are directing all aspects of product development. The first of these is with Teva Pharmaceutical Industries, Ltd., which has been working on an oral formulation of Copaxone® (glatiramer acetate), its injectable product for the treatment of relapsing-remitting multiple sclerosis. On March 20,2006, Teva disclosed in its 20-F filing that it has halted development of the oral enteric coated formulation of Copaxone, but is considering future development of other non-parenteral formulations of the product. It is unclear at this point in time whether any such future development would involve intellectual property licensed by us to Teva. The second license is with BioMS Medical Corporation, which is conducting a pivotal Phase II/III trial of its MBP8298 product for the treatment of secondary progressive multiple sclerosis. The study recently received its third positive review from the Data Safety Monitoring Board and interim results on the first 200 patients are now forecasted to be available during the first half of 2008. BioMS has also announced that it intends to initiate an IND on a second MS indication for MBP8298 before the end of this year. We are clearly pleased with BioMS' progress and look forward to the results of their clinical studies.
Final data from the oral insulin arm of the NIH sponsored diabetes prevention trial (DPT1), which tested a therapeutic method covered by AutoImmune's patents, was published in the May 2005 issue of Diabetes Care and showed a statistically significant benefit for patients enrolled under the original entry criteria. We are told that NIH is currently planning a confirmatory study to begin sometime the middle of this year and hope this might lead to an additional licensing opportunity for the company.
The success of our licensing efforts is dependent on expanding and defending AutoImmune's intellectual property. At year end we had 187 issued US and foreign patents, and have pending three continuation US patent applications and ten foreign applications. The majority of these relate to methods and products that induce immunological tolerance for the treatment of disease. We hope to see more patents issued in the future.
With adequate financial reserves to wait for results from clinical trials of products based on our intellectual property and the prospect of positive cash flows in the future, we believe we are well positioned for success.
Your interest in AutoImmune is greatly appreciated.
Sincerely,
Robert C. Bishop
Chairman of the Board
March 22, 2006
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