The Immune Response Corporation is an immuno-pharmaceutical company focused on developing products to treat autoimmune and infectious diseases. The Company's lead immune-based therapeutic product candidates are NeuroVax for the treatment of multiple sclerosis (MS) and IR103 for the treatment of human immunodeficiency virus (HIV). Both of these therapies are in Phase II clinical development and are designed to stimulate pathogen-specific immune responses aimed at slowing or halting the rate of disease progression. NeuroVax is based on the Company's patented T-cell receptor (TCR) peptide technology. In addition to MS, Immune Response has open Investigational New Drug Applications (IND) with the United States Food and Drug Administration (FDA) for clinical evaluation of TCR peptide-based immune-based therapies for rheumatoid arthritis and psoriasis. IR103 is based on the Company's patented whole-inactivated virus technology, and tested in extensive clinical studies of Remune, the first-generation HIV product candidate of Immune Response. In early 2006, Immune Response made a strategic decision to accelerate the development of IR103, rather than pursue a Phase III trial with Remune. NeuroVax NeuroVax is a novel, immune-based therapy designed to induce the body's own defense system to combat the pathogenic T-cells known to be the primary cause of MS. Short TCR peptides with amino acid sequences mimicking sequences on the surface of the pathogenic T-cells within the central nervous system have been shown in animals to induce immune responses that can cure MS-like disease. The mechanism of action appears to be the induction of regulatory T-cells capable of down regulating the pathogenic T-cells causing the disease. NeuroVax, containing an adjuvant and a combination of three TCR peptides selected to represent the pathogenic T-cells in about 90% of MS patients, has been shown in clinical trials (see below) to stimulate disease-specific immune cells in essentially all treated patients; a significant percentage of which are regulatory T-cells capable of suppressing autoreactive CD4+ T-cells. NeuroVax was designed with the goal of increasing the likelihood of producing disease-specific immune responses capable of controlling the activity of these pathogenic T-cells similar to their control in healthy individuals. A 40-patient open label Phase II study was initiated in 2003 to allow patients previously enrolled in the blinded trial above to receive NeuroVax. These studies were performed at Oregon Health and Science University in conjunction with the Immune Tolerance Network. The fully enrolled study was completed at the end of 2005. NeuroVax induced strong immune responses in essentially all treated patients. Results reported during 2005 from a completed Phase I/II study showed that NeuroVax restored normal levels of FOXP3+ Treg cells in patients who, at baseline, had statistically significant diminished levels of FOXP3+ Treg cells compared to healthy controls. After 24 weeks, the patients treated with NeuroVax who completed the trial showed stimulation of their FOXP3+ Treg cells to levels well above their suppressed baseline levels, and often to levels higher than healthy controls. These elevated levels of FOXP3+ Treg cells activity remained stable through the complete 52-week study. These new data indicate a novel, specific mechanism of action for NeuroVax that could restore regulatory functions of the immune system in MS patients that are critical to controlling the pathogenesis of the disease. Immune Response is planning additional Phase II studies of NeuroVax to test the clinical benefits of the product. One such study will be conducted primarily in Eastern Europe and will include an evaluation of clinical endpoints including MRI and relapse rate. The Company also has FDA approval to initiate a second 40-patient trial that will enroll new RRMS patients along with patients previously treated with NeuroVax. Further, Immune Response holds IND applications on similar TCR peptide-based therapies targeted at rheumatoid

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