By Mary Welch

The Immune Response Corp. cut its staff by 30 percent in an effort to reduce expenses and focus efforts on its late-stage programs for HIV and rheumatoid arthritis.

The across-the-board cuts of 43 people leave the company with about 110 employees. Among the hardest hit were the scientists and their support personnel. In addition, senior management is taking reductions in pay.

The company, based in Carlsbad, Calif., will take a $650,000 one-time charge against earnings in the second quarter, or 3 cents per share. The total decrease in expenses should be phased in over several quarters.

"These are meaningful cuts. Our chief financial officer is desperately trying to come up with final numbers as to how much this will save the company and reduce our burn rate," said Creighton Lawhead, the company's vice president and head of commercial affairs and investor relations. "But part of those numbers involve the winding down of the clinical trials and we don't have firm numbers on that yet."

The restructuring will not affect the company's Pennsylvania manufacturing facility for Remune since additional pivotal trials of the immune-based HIV therapeutic, testing it for viral load reduction, likely will start next quarter.

Part of the company's troubles started last month when a monitoring board recommended stopping a Phase III trial of Remune. The 2,500-patient, placebo-controlled study evaluated Remune's ability to slow disease progression by tracking the clinical endpoints of a diagnosis of AIDS or death. (See BioWorld Today, May 18, 1999, p. 1.)

"Looking back on it, the trial was the catalyst in the cutbacks," Lawhead said. "First off, we didn't need the people in clinical regulating and then it became necessary to cut critical mass. Even though it's painful, it's necessary."

The data safety monitoring board found there was no difference in those endpoints between the placebo patients and Remune-treated patients.

Remune is an inactivated form of HIV lacking its envelope that is combined with a mineral oil-based adjuvant. The drug, which is injected every three months, is designed to stimulate a patient's own immune defenses to keep the virus in check.

In 1996, when the company began its Phase III study, the rate of disease progression for HIV patients was 6 percent. Today, thanks to highly active antiretroviral therapy, the percentage is less than 1. However, the decrease makes it more difficult for companies to reach clinical endpoints.

In that large pivotal trial, the company randomly selected 250 patients and monitored their viral load as well as their cell-mediated immunity. The results showed Remune achieved statistical significance in reducing the amount of circulating virus. The study also showed that with this subgroup, cell-mediated immune responses could be re-established.

The FDA's Center for Biologics Evaluation and Research (CBER) previously did not accept reduction in viral load as a surrogate endpoint. However, the company's marketing partner, Agouron Pharmaceuticals Inc., of La Jolla, Calif., in April convinced the CBER to accept it as evidence of efficacy.

Pivotal trials with the endpoint of viral load reduction will be headed by Agouron and Warner-Lambert Co., of Morris Plains, N.J., which purchased Agouron for $2.1 billion earlier this year. Agouron and Immune Response signed their $77 million deal a year ago. (See BioWorld Today, Jan. 27, 1999, p. 1; and June 12, 1998, p. 1.)

"From this point on, the Remune trial will be led by Agouron and Warner-Lambert," Lawhead said. "They will have primary responsibility for carrying out the trial and funding it."

Immune Response finished Phase IIb trials last year with IR501, a compound for rheumatoid arthritis, and the company is waiting to sign a partnering agreement before proceeding into further trials.

Immune Response's stock (NASDAQ:IMNR) closed Monday at $5.625. down 12.5 cents per share.