By: BRADLEY J. FIKES - Staff Writer

CARLSBAD -- The Immune Response Corp. announced Tuesday that it has agreed to pay a total of $9.8 million to settle two class action lawsuits. The Carlsbad-based biotechnology company said it did not admit wrongdoing or liability.

Immune Response's finances will not be affected, the financially strapped company said in a news release, because the amount is within insurance limits.

Shares of Immune Response closed Tuesday before the announcement at 2 cents each, a decline of 1.89 percent for the day.

Immune Response became famous in the late 1980s and early '90s for Remune, patterned after the polio vaccine invented by the late Jonas Salk, a company co-founder.

The settlements concern a federal securities class action lawsuit filed in 2001, along with a derivative state lawsuit. In addition to the company, the settlement includes company directors and officers named in the state lawsuit.

Immune Response was sued in federal court on behalf of investors who purchased the company's stock from May 1999 through early July 2001. The company's stock plunged from $18 per share in March 2000 to $2 and below by summer 2001.

The decline occurred as problems began to surface in testing the company's former flagship drug, Remune. The drug was supposed to rebuild the immune systems of patients with HIV, the virus that causes AIDS. However, Remune has not shown efficacy in repeated clinical trials.

Immune Response is still testing a modified form of Remune, but its main focus now is on NeuroVax, a drug it is testing for multiple sclerosis.

The derivative complaint was filed in 2005. The settlement includes about $9.6 million for the federal suit and $250,000 for the state litigation.

A preliminary settlement hearing for the federal suit is scheduled for Dec. 4. The settlement hearing for the state lawsuit is set for Nov. 27.

As a part of the state settlement, Immune Response has said that it will agree to adopt corporate governance restrictions.

-- Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.
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