To Our Shareholders:
AutoImmune Inc. had a very exciting year in 2007, highlighted by significant progress in several programs and
increasing shareholder value.
While the sales of dietary supplement products at Colloral LLC, our joint venture with Deseret Laboratories,
Inc., were lower than prior year, they are clearly trending up with end users. Bronson Laboratories has featured
Vital 3 in its last three catalogs and we have had good results marketing on television through The Shopping
Channel in Canada. We are optimistic that the efforts of Futurebiotics LLC to enter other channels and new
markets with this product will be successful over the long term.
Several years ago we licensed one application of our intellectual property to BioMS Medical Corporation, which
it uses in its MBP8298 product. BioMS is now conducting two pivotal trials on MBP8298 for the treatment of
secondary progressive multiple sclerosis and a Phase II trial on its use for the treatment of relapsing-remitting
multiple sclerosis. In December 2007, BioMS announced that it had signed a license and development agreement
with Eli Lilly and Company granting them exclusive worldwide rights to MBP8298. AutoImmune's rights to
payments and royalties and sales of MBP8298 are unchanged by this new agreement. Lilly's commitment to
commercializing this product is substantial, and if the product is successful in clinical trials, their regulatory,
marketing and sales capabilities will be of great value in capitalizing on this opportunity. We are clearly pleased with
BioMS' progress and look forward to the results of their clinical studies, some of which should be available this year.
We also have a license agreement with Teva Pharmaceutical Industries, Ltd., relating to the development of an
oral formulation of Copaxon® (glatiramer acetate), its injectable product for the treatment of relapsing-remitting
multiple sclerosis. In 2006, Teva announced that it would not continue development of the enteric coated
formulation that used our intellectual property, but was considering development of other non-parenteral
formulations of the product. We do not know if they are pursuing such development or, if they are, whether the
new formulations will involve intellectual property licensed by us to Teva, but Teva continues to make the payments
necessary to maintain the license of our intellectual property.
In February 2007, 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. By the end of the year they had entered
more than sixty of the planned 350 patients in the study. We hope this effort might lead to an additional licensing
opportunity for the company.
It is clear that the success of our licensing efforts is dependent on expanding and defending AutoImmune's
intellectual property. At year-end, we had 199 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.
Given our relatively small cash burn rate, we have adequate financial reserves to wait for results from clinical
trials of products based on our intellectual property and we believe we are well positioned for the future.
As always, your interest in AutoImmune is greatly appreciated.
Sincerely,
Robert C. Bishop
Chairman of the Board
March 16, 2008
R e t u r n