Frances Bishopp

AutoImmune Inc.'s stock plummeted 67 percent Monday on news of its Phase III trial results of Myloral for multiple sclerosis showing the drug had no benefit over a placebo.

AutoImmune's stock (NASDAQ:AIMM) closed Monday at $4.50, down $9.25.

The 500-patient Phase III trial was a two-year study designed to demonstrate a significant reduction in neurologic attack rates in patients suffering form multiple sclerosis.

Describing the results as "unusual," Robert Bishop, president and CEO of AutoImmune, told BioWorld Today there was a substantial reduction in attack rate for active treatment, and a substantial reduction in attack rate for the placebo medication.

"It is an unprecedented high placebo rate, the highest we have seen so far," Bishop said. "There are several postulates, but I would suggest patient expectations for a favorable response and patients' inability to determine whether they were on active or placebo contributed to the results," he said.

Myloral's Future In Doubt

Substantial reductions in neurologic attack rates were observed in all active and placebo groups, but they were of comparable magnitude.

Disability associated with multiple sclerosis was examined as a secondary endpoint and there was no difference between active and placebo in the rate of disease progression by this measure, Bishop said.

The future of Myloral is difficult to forecast, Bishop said, because the company does not yet have all the information. Specific statistics of the Phase III trial will not be released until the fall, he said, adding Myloral development will be put on hold over the near term.

Myloral, which has been in development by the Lexington, Mass., company since 1989, is an oral, solid- dosage formulation of purified cerebroprotein-lipid complex from bovine brains. Myloral builds on an approach pioneered by AutoImmune and collaborators at Harvard University Medical School using oral tolerance as a basis for treating autoimmune disease. Oral tolerance exploits specialized mechanisms of the mucosal immune system lining the small intestine.

Oral tolerance is based on the body's ability to take in foreign proteins and not trigger a broad immune attack against these proteins. In very selective doses, the proteins are processed in the gut and trigger production of regulatory T cells, which then move through the body to suppress the autoimmune attack.

AutoImmune, which had no collaborations for Myloral, will focus its energies on Colloral, its product for rheumatoid arthritis, Bishop said. Colloral is a liquid oral formulation of Type II collagen, which is a major component of articular cartilage in joints.

Colloral is AutoImmune's next closest product to market. Data are expected in May from Phase II clinical trials, which, if positive, could lead to a Phase III trial program before the end of the third quarter, Bishop said.

"If Colloral is successful," Bishop said, "it by itself could form the basis for a strong and growing company."

Analyst Rachel Leheny, of Hambrecht & Quist Inc., of New York, said the Myloral results were a significant negative for the company; however, the hope that Colloral will work should indicate "that all was not over."

"The early Colloral studies certainly look good," Leheny said.

AutoImmune and Eli Lilly & Co., of Indianapolis, are collaborating on AutoImmune's product, AI-401, for the treatment of Type I diabetes. AI-401, an oral form of recombinant human insulin, is currently the focus of three Phase II trials and Eli Lilly is also providing AI-401 for the diabetes prevention trial being conducted by the National Institutes of Health.

A preliminary figure for AutoImmune's cash on hand, as of March 31, 1997, was approximately $43 million, Bishop said. *