San Diego Business Journal

Shares of Immune Response Corp. continued to hover in the $4 range the week after publication of an unfavorable university study of its AIDS drug, Remune.

The publication of the three-year study in The Journal of the American Medical Association led the firm to file legal action against the University of California, San Francisco, and Dr. James O. Kahn, the author and leading investigator of the study.

Shares of the Carlsbad-based biotechnology firm fell 19 cents to $4.44 on Nov. 8 from $4.63 on Nov. 1, the day the article ran.

James McCamant, editor of the Berkeley-based Medical Technology Stock Letter, said some investors may have had unrealistic expectations. gh-risk drug and did a good job of getting people excited about it," McCamant said.

He added this doesn't mean the drug is a complete failure.

He said the fact that pharmaceutical giant Pfizer Inc.'s San Diego-based Agouron Pharmaceuticals unit signed a licensing agreement to obtain U.S. rights to Remune and still develops it, speaks for Remune.

McCamant, however, said Immune Response has made a mistake by alienating Kahn and UCSF.

"Typically questions about publishing get resolved without them being publicly talked about," he said.

In the legal action , which is expected to go before an arbitration panel later this month , Immune Response seeks $7 million to $10 million in damages as a result of the story, which the firm claims is flawed because it fails to include a favorable study.

Kahn disagreed with the firm's interpretation of the favorable results.

Last week, Immune Response was criticized in the media for trying to block the JAMA article.

Taking Sides

Several researchers sided with Kahn for publishing the report despite Immune Response taking legal action in September to block the article.

The article has also spurred debate of ownership of medical data and the ethical issue of protecting patients in trials.

Kahn, who has led dozens of clinical trials, said most drug makers value an independent analysis of their product. Most, therefore, trust investigators to interpret the data correctly.

"Immune Response was shameful in the way they've undercut that confidence," he said.

The three-year study of 2,527 patients at 77 hospitals was problematic from the start. McCamant said shortly after the study began in 1996, the powerful AIDS protease inhibitors started selling commercially.

The arrival of these drugs marked a turn-around for AIDS patients, prolonging their life expectancy for years.

At the same time, the Remune study was designed to show benefits in slowing the progression of the disease or patients' survival.

"But it was difficult to show benefits of Remune, because patients lived longer without progressing to AIDS (as a result of the new AIDS drugs)," said Laura Hansen, an Immune Response spokeswoman.

In May 1999, an independent data-safety monitoring committee concluded Remune failed to show any benefit in slowing the progression of the disease or patients' survival.

Crucial Information

Kahn also reported negative results, and Immune Response responded by refusing to provide any data from other hospitals, he said.

Kahn said Immune Response repeatedly declined to give him contact information for the other doctors involved in the trial.

He said he then became increasingly concerned the doctors may not know of the negative results, which meant the patients wouldn't find out either.

Hansen rejected these charges, saying Kahn had the phone numbers of 40 investigators. Kahn said he didn't.

For Kahn, however, the already strained relationship with Immune Response escalated when he received a letter from Dr. Ronald B. Moss, Immune Response's vice president of medical affairs.

In the letter dated Jan. 17, Moss informed Kahn of a plan to conduct "final analysis" of the data at the company along with a clinical research company.

Chris Patti, an attorney for UCSF, said the letter came after Kahn and his medical team refused to sign an agreement that would have transferred ownership of the data to Immune Response.

Kahn had 95 percent of the data, so he proceeded to analyze it without the subset study. He informed Immune Response of the findings.

Tried To Stop Publication

In September, Immune Response filed legal action to stop the article, said Chris Patti, an attorney at UCSF, but Kahn and his team published the data anyway.

Patti said documents of the legal proceedings will not be made public, because the case will go before arbitrators, not a court.

A panel of arbitrators had not been established as of Nov. 8. Patti anticipates arbitrators will decide on the case within the next two weeks.

Patti is optimistic the arbitrators will agree with the university and Kahn.

"The contracts are quite clear that Kahn had the right to publish the data as did the co-authors," Patti said.

Hansen contended Kahn had no right to publish the data without input from other doctors.

On Oct. 31, Immune Response reported its own positive findings of a random subset of 252 patients in a company press release.

Kahn said Immune Response failed to interpret the data of the smaller patient trial according to the protocol dictated by the Food and Drug Administration.

He also said the legal action will not deter him to lead future trials with other sponsors.

Patti added, "Our university takes a very clear position that is absolutely necessary that researchers maintain the right to publish without the sponsor's influence."

McCamant said Remune is still potentially interesting, although he cautioned against buying Immune Response shares.

"I never had real confidence in management," McCamant said.