To Our Shareholders:
AutoImmune Inc. made progress on a number of fronts this past year and hopes to see increasing shareholder value during 2007.
With the assistance of Business Development Resources, Inc., we completed execution on a consumer oriented marketing plan for the dietary supplement manufactured and distributed by our joint venture with Deseret Laboratories, Inc. The immediate result of that effort was the signing of an agreement with Futurebiotics, LLC, which has begun marketing the joint venture's product under the Vital 3™label in GNC retail stores throughout the United States. Revenue from sales of the dietary supplement for the year 2006 increased more than six-fold over 2005, and we are optimistic it will continue to grow this next year.
As long term shareholders well know, AutoImmune has licensed two applications of its intellectual property to capable partners who are responsible for all aspects of product development. The first of these is with BioMS Medical Corporation, which is conducting a multinational, pivotal Phase II/III trial of its MBP8298 product for the treatment of secondary progressive multiple sclerosis. This study recently received its sixth positive review from the Data Safety Monitoring Board, and BioMS expects interim results on the first 200 patients to be available at the end of the second quarter 2008. BioMS has also announced that it will initiate a second Phase III trial of MBP8298 for this same indication in the United States during 2007 and that it has already begun a multi-center, placebo controlled, Phase II trial of MBP8298 for relapsing remitting multiple sclerosis. We are clearly pleased with BioMS' progress and look forward to the results of their clinical studies. The second license is with Teva Pharmaceutical Industries, Ltd., for oral formulations of Copaxone® (glatiramer acetate), its injectable product for the treatment of relapsing-remitting multiple sclerosis. In March 2006, Teva halted development of an enteric-coated formulation, but continued preclinical development on new and potentially improved oral formulations of Copaxone. It is unclear at this point in time whether any such development will involve intellectual property licensed by us to Teva.
The long awaited confirmatory study on the efficacy of tolerization with oral insulin finally began during February 2007, when the NIH began enrolling patients in a multi-center Phase III clinical trial on whether treatment with our product, AI 401, can delay or prevent Type 1 diabetes. We 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 198 issued US and foreign patents, and have pending one continuation US patent application and five 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, we believe we are well positioned for the future and that our technology will be proven of significant therapeutic value.
Your interest in AutoImmune is greatly appreciated.
Sincerely,
Robert C. Bishop
Chairman of the Board
March 22, 2007
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