To Our Shareholders:
This past year was a good one for AutoImmune Inc., highlighted by progress in several key programs,
including BioMS Medical Corporation’s ongoing Phase III trials.
Several years ago we licensed one application of our intellectual property to BioMS, which it uses in its
dirucotide product (formerly called MBP8298). BioMS is conducting two pivotal trials on dirucotide for
the treatment of secondary progressive multiple sclerosis and the FDA has granted the product fast track
designation. Data from the first of these Phase III studies is expected during the last half of 2009. 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 dirucotide. AutoImmune’s rights to payments
and royalties and sales of dirucotide were 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 and we should see
increasing shareholder value.
The sales of dietary supplement products at Colloral LLC, our joint venture with Deseret Laboratories,
Inc., were higher than in the prior year and are clearly trending up with end users. Bronson Laboratories
still features Vital 3 in its catalogs and we continue marketing on television through The Shopping
Channel in Canada. We remain optimistic that the efforts of Futurebiotics LLC to enter other channels
and new markets with this product will be successful over the long term.
We also have a license agreement with Teva Pharmaceutical Industries, Ltd., relating to the development
of an oral formulation of Copaxone® (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,
and, if they are, whether the new formulations will involve intellectual property licensed by us to Teva.
Teva continues to make the payments necessary to maintain the license of our intellectual property.
By the end of 2008, the NIH had enrolled 115 of 350 anticipated 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 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 201 issued US and foreign patents, and have
pending three 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.
Your interest in AutoImmune is greatly appreciated.
Sincerely,
Robert C. Bishop
Chairman of the Board
April 14, 2009
R e t u r n